Advertisers Plan More Spend Across Online Video Ad Formats

May 3, 2019

This article is included in these additional categories:

Advertising Trends | Creative & Formats | Digital | Display & Rich Media | Social Media | Spending & Spenders | Video

Major advertisers plan to spend 25% more this year on digital video than they did in 2018. And as they invest more in video, advertisers are also expanding the use of newer ad formats such as shorter ads, vertical video ads and Stories, per a new report [PDF] from the IAB.

Last year 53% of the marketers and agencies surveyed (all of which have at least $1 million in total annual ad spend) said they used 6 second videos ads. This year, close to 6 in 10 (57%) plan on using these shorter ad formats. This comes even as benchmark data indicates that while completion rates for 6 second ads are still rather high (79%), completion rates actually go up as the length of the ad increases.

More advertisers also plan on using vertical video ads this year (55%) than last (48%). This may be due to the fact that YouTube has started to allow brands to start using vertical video ads on their platform, a change that happened towards the end of last year.

The trend of using Stories appears to be strengthening too, with 51% of respondents saying they plan on using them this year, compared to the 42% from 2018. This could very likely be because marketers are seeing how effective social media Stories can be. Earlier this year, research from Buffer found that 57.6% of the marketers they surveyed believed that Stories were either somewhat effective (35.0%) or very effective (22.6%).

Another growing trend in video ads relates to shoppable videos (i.e. ads that allow users to scroll through product selections and buy within the ad itself). These video ads saw a 10 percentage point increase in intended use from 2018, with nearly half (49%) of respondents saying they plan to use them this year. This form of advertising appeals particularly to younger consumers, with 3 in 10 Millennials showing interest in having access to links to purchase products directly from video.

Advertisers are realizing that they benefit from developing campaigns that are not just intended for television, but are developed for cross-screen promotion. Three in 10 (31%) respondents say their creative is developed with the intention of being used for cross-screen purposes, with only 15% saying their creative is developed exclusively for TV.

With the new video formats, advertisers are also embracing industry trends and acknowledging their benefits. The vast majority (93%) of respondents said they either completely agree (43%) or somewhat agree (50%) that direct to consumer advertising offers more data to track the impact of the ad, while 9 in 10 also say they will be increasing programmatic spend this year. Three-quarters agree, to some extent, that their company advertises almost exclusively on digital.

Where is the Funding Coming From?

Almost three-quarters (72%) of respondents said they would be increasing spending on digital video advertising in the next 12 months. While 57% said that they will see an overall expansion of budgets, others are shifting funds from other advertising types to accommodate the growth in digital video advertising.

Close to half (47%) of those surveyed said they are shifting funds from their broadcast TV advertising, while 41% are moving funds from their cable TV ad budget. Advertisers are also shifting funds from their non-video ads online (35%), advanced/interactive TV (35%) spend, and from budgets that were not digital or TV (26%) in order to make a bigger investment in digital video ads.

To read more, download the report here.

About the Data: IAB surveyed 350 marketer and agency decision-makers in the following sectors: Automotive, CPG, Fashion & Apparel, Finance, Home Furnishings Media & Entertainment, Retail, Telecommunications between February 18 – March 1, 2019.

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